The US Commodity Futures Trading Commission has granted conditional broker-registration relief to passive crypto software providers through a comprehensive no-action position. According to the CFTC's Market Participants Division, the new relief was announced on September 17 and builds on earlier relief previously granted to crypto wallet provider Phantom in March. This decision allows other qualifying software companies to rely on the same position without requesting individual permission, potentially enabling crypto wallets to add access to products such as perpetual futures and event contracts without registering as brokers.
Under the new regulatory framework, crypto wallets can provide users with access to regulated derivatives without becoming brokers, provided they meet 10 specific conditions. As reported by the CFTC, the software provider can advertise the service, direct customers to a particular registered company, and receive a share of trading revenue. The provider must operate only as an interface to trading venues and cannot become a trading venue itself, with users trading exclusively on CFTC-registered exchanges. The software company cannot control customer assets, decide on execution, or send buy/sell messages, and must disclose information, retain records, and accept CFTC oversight. The relief applies when software connects users with registered futures commission merchants, introducing brokers and designated contract markets, with customers maintaining direct relationships with regulated entities.
The CFTC's relief comes with strict conditions that limit developer activities. According to the agency's Staff Letter 26-25, providers must file a notice with the Market Participants Division and agree to satisfy every condition, including consent to CFTC jurisdiction for investigation and enforcement. The software cannot publish advertising requiring National Futures Association advance approval, and customers must be able to access regulated entities without using the provider's software. Providers and personnel cannot be subject to statutory disqualification, including certain convictions or regulatory orders preventing participation in registered derivatives businesses. The relief remains in place until the effective date of any Commission rule dealing with introducing-broker requirements, potentially subject to future regulatory changes.
The CFTC ruling has important limitations that do not provide comprehensive protection for software developers. The decision only applies to registration under derivatives law and does not bind the Justice Department or change other federal laws related to money transmission, sanctions, and money laundering. The ruling specifically does not offer protection to developers facing criminal allegations, such as those brought in the Tornado Cash case. Roman Storm's prosecution was based on accusations of involvement in a crypto-mixing service rather than just providing access to registered derivatives companies. The relief does not provide blanket protection for every developer or crypto application, with control over customer property and trade decisions remaining central to whether conduct stays within the passive model.
The CFTC's action follows the Senate's failure to advance the Digital Asset Market CLARITY Act on September 15, which sought to divide digital-asset oversight between the SEC and CFTC. The CFTC's relief arrived on the same day as the Securities and Exchange Commission's separate five-year trading exemption for tokenized National Market System stocks. Both agencies are using existing powers after the CLARITY Act setback, with the House Ways and Means Committee advancing the Digital Asset Tax Certainty Act in a 38–5 vote on September 16. The CFTC retains its enforcement powers outside the registration issue, with fraud, manipulation, and breaches of conditions still triggering regulatory action, while registered exchanges remain responsible for their own duties under the Commodity Exchange Act.
